2019 Commentaries

A decade of gratitude

On this exact day ten years ago I joined Jefferies. At that time it had been about 7 years since I was on the sell side, but I knew that after spending the bulk of 2009 at the Federal Reserve Board in DC, I wanted to return to a research rather than a trading role. […]

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You have come a long way, Eric

Back in December 2013 Eric Rosengren was the lone dissenter against the FOMC move to taper QE asset purchases. His rationale was outlined in the minutes as follows: Mr. Rosengren dissented because he viewed the decision to slow the pace of asset purchases at this meeting as premature. In his view, with the unemployment rate still elevated […]

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A risk parity math refresher

After reinitiating risk party last week, I wanted to spend a few moments on the exact trade structure so as to avoid any confusion. In past years I have generally operated with a weighting of $100k per basis point of fixed income for every $100m in spoo notional. This time I am doubling the size […]

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Spoos & 2s, with an extra helping of rouge

It has been just about 5 months since spoos first pushed above the 3000 level. At that point they were up about 20% year to date, while the blues were up about 9%. Together, our beloved spoos and blues had ripped a whooping 29% in the first 6 months of 2019. And even with our […]

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Inflationistas, dead!! Recessionistas, dead!! Soft Landers, dancing!!

Coming into 2019 the macro world was largely divided into two camps: recessionistas and inflationistas. The former were looking for the economy to roll over, the Fed to slash rates, bonds to rally, and stocks to crash. The latter were calling for inflation to spike, the Fed to hike rates aggressively, bonds to sell off, […]

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Only Inflation Misses Matter, Not Trade Wars: Jay’s Dovish Message

By cutting rates 25bps, dropping the “act appropriately” language, and signaling a more balanced approach to assessing the “appropriate path” for policy rates, the FOMC clearly signaled a pause. And with just that information in hand after the release of the policy statement, the market initially reacted with a moderately hawkish bias. But once Jay […]

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